Compounding Pharmacy Fraud Defense Lawyers

Compounding Pharmacy Fraud Attorneys

What is a Compounding Pharmacy Fraud and Why Do We Need Them?

The average person is unlikely to understand exactly what a “compounding pharmacy” is, what it does, or how it fits into the scheme of healthcare services.  Compounding pharmacies are on the rise in the United States as more and more pharmacists see the need to personalize patients’ drugs.  

Sometimes patients need specialized medication that cannot be found in general circulation. It would be unprofitable for pharmaceutical companies to produce these limited-use drugs. 

Compounding the drugs makes it easier for pharmacists to reduce the dosages of medications for babies and young children.  It also makes it easier for pharmacists to create creams for patients who are unable to swallow oral medications. Compounding also allows pharmacists to tailor medications for patients’ allergies.  As the usage of compounded drugs increases, so does the government’s attention to potential compounding pharmacy fraud

Patients with most conditions will benefit from a drug that any physician might prescribe for them. However, sometimes patients are allergic to one or more of the ingredients in the drug, or a drug that could help children is available only in a more potent adult dosage.

Many patients cannot take potentially helpful prescription drugs that are available today. As everyone knows, nearly every prescription drug has potential side-effects. These side-effects seldom affect the average patient, but some patients may suffer from a litany of side-effects that range from the merely uncomfortable to the deadly. 

This is where the compounding pharmacy enters the picture. In cases such as those cited above, a compounding pharmacy develops custom-tailored drugs for a patient, omitting any ingredient(s) that may be toxic. Alternatively, the compounding pharmacy may legally develop a weaker dosage of a commercially-sold medication for those who cannot tolerate the normal dosage.


Schedule a Confidential Initial Compliance Assessment with Our Federal Health Care Group


What is Compounding Pharmacy Fraud?

Allegations of compounding pharmacy fraud constitute a serious accusation and may even constitute a federal felony.  The fines and penalties can be astronomical and may even result in a prison sentence. Unfortunately, the nature of compounding pharmacies has led to many costly cases of abuse to the system. This has led to a significant increase in investigations of Tricare compounding pharmacies as well as with all common compounding pharmacies. Federal investigators now pursue any evidence of healthcare fraud more aggressively than ever before.

Criminal search warrants executed by the United States Attorney’s Office in connection with compound pharmacies have been increasing in recent years. Allegations of falsified records and kickbacks are among the many reasons that investigations and subsequent indictments are filed for health care fraud claims.  Compound pharmacies are able to bill for each individual ingredient used to formulate the compound. The government will often allege that not all of the ingredients were required or that the patient did not benefit from the compounded medication.

The federal government will often file compounding pharmacy fraud charges for the following:

  • Overbilling
  • Kickbacks
  • Billing for unnecessary products
  • Providing automatic on-going refills
  • Mass compounding
  • Manufacturing compound drugs that are identical to commercially available alternatives


How Common are Compounding Pharmacies in the United States?

There are currently over 55,000 compounding pharmacies in the United States. Of these, nearly 8,000 offer advanced compounding services. This staggering number of compounding pharmacies presents a daunting challenge for federal investigators.

It should also be noted that compounding pharmacies are not well-regulated. There is no provision for safety or the benefits of any product compounded in these pharmacies.


Who Investigates Compounding Frauds in retail pharmacy?

There are several agencies that investigate compound pharmacy fraud in the United States.  The following agencies investigate compound pharmacy fraud:

  • Department of Labor (DOL)
  • Federal Bureau of Investigation (FBI)
  • Food and Drug Administration (FDA)
  • Department of Justice (DOJ)
  • Drug Enforcement Agency (DEA)
  • Office of the Inspector General (OIG)
  • Department of Health and Human Services (HHS)


What Happens In a Fraud Investigation?

In many cases, the pharmacy will receive a subpoena that is issued by the OIG. The subpoena will request the production of the companies documents for the following things:

  • Company records
  • Marketing agreements
  • Company financials
  • Physician relationships and other like relationships

These types of subpoenas may seem harmless.  However, the frightening part about them is that when they are initially served, it is not clear whether or not they are criminal or civil in nature.  Speaking with an experienced and skilled compound pharmacy fraud defense attorney will help to determine if they are criminal or civil matters. 

The other way that you find out that you are being investigated for fraud is when DEA, FBI, or FTA agents show up at your door requesting to speak with the staff members and employees about your business practices.  They will usually present a search warrant unless the investigation is part of a general inquiry. 


Tricare Compound Pharmacy Fraud?

Compound pharmacy fraud and Tricare compound pharmacy fraud can be tempting to any pharmacist because it is so easy to inflate the cost of ingredients, the time involved in developing prescriptions, the skills required, and a myriad of other expenses that are difficult to prove fraudulent.

With the increase in compounding pharmacies and the growing need for specialized medications that only compounding pharmacies can provide, criminal search warrants have been more frequently issued for an investigation into suspected cases of compounding pharmacy fraud. Being charged with this fraud opens the door to not only a very serious civil action but to a federal action by U.S. attorneys.

When a compounding pharmacy receives an order to develop a particular medication for Medicare, Tricare, or Medicaid patient, a door has opened. This open-door presents opportunities for fraud.


 What Happens if Fraud is Proved?

If fraudulent activity by any compounding pharmacy is proven, anyone convicted stands to lose everything. That can be a great blow to a career. A conviction could mean fines, restitution, imprisonment, and loss of licenses. For some, the possibility of losing the ability to earn a living in one’s chosen field of expertise is the most severe punishment of all.

Some of the fraudulent claims levied against government agencies include overbilling, kickbacks, charging for products that were unnecessary, never used, or never made, or setting up automatic refills.

Mass production of any drugs that are identical to commercial products is another field that is open to fraud.

The federal government aggressively investigates and prosecutes any allegations of fraud or abuse of the healthcare system. Compounding pharmacies fall under the same rules as regular pharmacies, physicians, nurses, therapists, and anyone else in the healthcare industry.


 What Happens if You Are Accused of Healthcare Fraud?

If you are convicted of any healthcare fraud, you may have to pay restitution in addition to fines. You could also end up in federal court and suffer imprisonment for up to ten years.

In addition to these costs and fines, there are attorney fees and a loss of income. A number of crimes may be charged separately and therefore recoupment of the different monies illegally obtained would be separately billed to the accused.

While on the surface healthcare fraud appears easy and appealing to many practitioners, the potential penalties hardly make it worth attempting. It should also be noted that failure to know or understand the statutes regulating healthcare fraud is an unacceptable excuse. 

Some of the laws that healthcare professionals should know are: 

  • You may be charged with submitting a fraudulent claim for payment and/or if you present falsified records or statements in an attempt to justify a fraudulent claim
  • If you are charged and convicted of conspiring with another individual or entity to gain fraudulent funds, you can also be subjected to severe penalties

What if you inadvertently submit an incorrect bill? Unfortunately, you’ll have to forget the old saying that “you’re innocent until proven guilty”. This is a case of complete reversal. Even a statement incorrectly submitted by accident may catch the eye of a diligent investigator and it will be entirely up to you to prove that the mistake was legitimate. Of course, when it’s just you against federal investigators, your chances of convincing them of a legitimate error are slim.

If you are ever questioned about an invoice, no matter if it was only a clerical error, your first step before talking to the federal investigators or to anyone else should be to enlist the services of an attorney with years of experience in healthcare fraud litigation.

No matter whether the charge is, overbilling, paying, or receiving kickbacks, it is incumbent on the government to prove its case against you.


Schedule a Confidential Initial Compliance Assessment with Our Federal Health Care Group


Do You Need to Hire An Attorney to Defend Against Compounding Pharmacy Fraud?

If you do have to appear in court, the right attorney is more important than ever. Your attorney will be fully cognizant of the laws governing healthcare fraud and will be at your side. Your attorney will challenge each and every accusation that the prosecution may present to the court. Therefore, your chances of prevailing will improve significantly.

The fees paid to a competent attorney will be well worth it by having the government’s case against you dismissed without ever having to appear before a judge.

Considerable publicity has recently been focused on compounding pharmacy fraud. As a result, more and more cases have been adjudicated with severe fines.

However, immense profits may be obtained through compounding pharmacy fraudulent claims. This is tempting to many and continues without any evidence of slowing down.

If a compounding pharmacy is was charged with fraud, everyone connected in any way to the fraudulent activity will face separate charges. In other words, instead of indicting the company alone, the contributors will be individually charged as well. That includes salespeople, billing people, managers, nurse practitioners, and individual pharmacists. 


 Examples of Fraudulent Activity in the Healthcare System

Some examples of fraudulent activity in the healthcare system include physicians prescribing medically unnecessary compounded medications.

  • Tricare is a health insurance plan for individuals in the military and their families. In an outstanding case, a court convicted nine defendants, all involved in a scheme in which they filed claims against Tricare for over $100,000,000.
  • Tricare has been a lucrative field for fraudulent claims submitted by compounding pharmacies and/or physicians prescribing unnecessary medications developed by compounding pharmacies.
  • One compounding pharmacy scheme involved billing Tricare millions of dollars for compounded drugs that were completely useless and unnecessary. This incident earned the recruiter around $1.5 million in commissions alone.
  • Another physician was charged for having submitted claims for reimbursement from Tricare for compounded medications that were not only unnecessary, but to patients that the doctor had never examined or even spoken to.
  • Yet another compounding pharmacy paid recruiters to secure referrals to military patients and their families because it could receive the highest reimbursement from Tricare. Again, many of the physicians involved in these referrals were paid by these recruiters to write compounding pharmacy prescriptions without ever having spoken to the patients involved.
  • Sometimes these illegal payments are covered by listing them as patient copayments or payments for a charitable organization that doesn’t exist.

With each passing day, investigators discover new and ever more creative schemes to defraud the government.


Compounding Pharmacy Fraud Defense Lawyer – Healthcare Fraud Group

If you own or are an employee of a compounding pharmacy, you should be aware of the dangers associated with falsifying any aspect of your occupation. If you are a physician, a nurse, or another person connected to a hospital and/or have a financial interest in any company to which you give or receive referrals, you are in grave peril of being convicted in a federal court of law.

The are many incidents on compounding pharmacy fraud, federal investigators have stepped up their investigations in relentless pursuit of any suspected illegal activity.

This drive to eliminate medical scams has spurred investigators to dig deep into the problem and uncover many of the creative ways in which compounding pharmacies can submit fraudulent invoices to Medicare, Medicaid, and Tricare for compound medication that was never made or unnecessarily developed. Some compounding pharmacies have even bought lists of patients to whom they sent creams and lotions without the knowledge of physicians in order to give patients the impression that the medication was prescribed by their personal physicians.

If you are employed in any capacity by the compounding medical industry or have any connection whatsoever to one or more, it is highly probable that you’ll be investigated for fraud sooner or later.

If you find yourself under federal investigation, your first move before speaking to anyone at all should be to contact a reputable, experienced compound pharmacy attorney like the Healthcare Fraud Group. An attorney well-versed in the law will know exactly how to counter any accusation made against you… Call Now 888-402-4054.